#1 the caribbean concoction - coffey notes · 2019-02-09 · #1 the caribbean concoction •...
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#1 The Caribbean Concoction
• European discovery - most significant events in human history
• Concoction: a curious mixture; an elaborate, improbable story
• 500 years of imperialism & colonization
• 20th Century - explosive age of decolonization
• Cold War politics
• Today - tourism of a romanticized region1
Welcome – thanks for coming
• European discovery - most significant events in human history..
• Purpose of my lectures is to give you a better appreciation and
understanding of this historic and intriguing Caribbean.
• Today will highlight
• European discovery - most significant events in human history
• The Concoction: a curious mixture; an elaborate, improbable story
• 500 years of imperialism, slavery & colonization
• 20th Century - explosive age of decolonization
• Cold War politics
• Today - tourism of a romanticized region
1
2
Joe Coffey – NCL Destination Lecturer•Purpose: enrich your Cruise experience•Background: Farm boy, PhD in economics, former college professor and business exec
•“Retired”: Teaching world affairs classes•Cruiser: 10 years as lecturer over most of globe•Educator: Try to be objective and global, backed by data and references
• Topics: Global and historical significance: Past, Present and Future of country/region
• Welcome! I am Joe Coffey, a NCL Speaker
• Purpose - enrich your appreciation this fascinating and
historic region we will be visiting on this beautiful ship
• PhD in economics and retired college professor and
business executive
• Lived in Peru for 2 years and wrote PhD on Cuzco
agriculture
• Retired in FL - lecturing about world affairs in locally and
cruise ships
• My 13th series on cruises around the world
• Slides of 45 minutes and then 10 minutes Q&A
• Welcome you to stop and chat during our cruise
2
Topics (tentative dates)
1. Dec 9: The Caribbean Concoction
2. Dec 11: Panama Canal Connection
3. Dec 12: What Has South America Wrought to the rest of the world?
4. Dec 15: Cuzco, Peru: Sacred Capital of Incas & Legendary Lost City of Machu Picchu
5. Dec 18: South America – Whither the Forgotten Continent?
6. Dec 20: Understanding (amazing) Chile
3
1. Dec 8: The Caribbean Concoction: Highlights the history and significance of Caribbean region
2. Dec 11: Panama Canal Connection: The importance of the Canal as a vital conduit of global
exchange and progress
3. Dec 12: What Has South America Done? Explore the South’s contributions such as the
Columbia exchange, gold and silver riches, and fruits of plants to the world
4. Dec 15: Cuzco, Peru: Sacred Capital of Incas and the Legendary Lost City of Machu
Picchu: The history of the incredible Inca empire and Cuzco one of the oldest continuously
occupied city of the Americas and Machu Picchu – legendary lost city
5. Dec 18: South America – Whither the Forgotten Continent? World attention has focused on
fall the Soviet Union, the rise of China and conflict in the Middle East. But the progress and
potential in South America should not be overlooked. With its vast natural resources, agricultural
potential, and rising population, it has a promising future that should not be forgotten.
6. Dec 20: Understanding Chile: Chile has risen from a very remote to an advance d country
3
Reminder – importance of (under-appreciated) natives of Caribbean 4
Reminder of role of the (under-appreciated) natives of Caribbean
• Poster “In 1492 Native Americans discovered Columbus lost at sea”
dramatizes the significant but often forgotten role of Latin Americans
• As the old quip goes, ‘Christopher Columbus: Didn’t know where he
was going. Didn’t know where he was when he got there. Didn’t know
where he had been when he got back.’ —Anon
• European discovery of Americas – a most significant events in human
history
• And Caribbean have had significant influence on the world
4
5
History of Caribbean◼ 1492: Columbus first voyage and claimed for Spain
◼ 1600s: British, French & Dutch take from Spanish
◼ 1650-1730: Golden Age of Piracy
◼ 1700-50s: Expansions of slaves, sugar, tobacco, trade
◼ 1834: Slavery abolished in British Empire
◼ 1915-34: US occupied Haiti & Dominican Republic
◼ 1953: Fidel Castro revolution against General Batista
◼ 1962: Cuban Missile Crisis
◼ 1991: USSR military leave Cuba after collapse
◼ 2008: Fidel resigned & brother Raul succeeds
◼ 2010: Haiti earthquake kills 316,000 & million homeless
◼ 2015: US & Cuba reopen embassies but still embargo
◼ 2016: Death of Fidel; in 2018 non-Castro president
• If history is “one damn thing after another, Caribbean is prime example
• Past 500 years suffered under colonization, slavery, disease, natural
disasters, coups, embargoes, revolution, racism, near nuclear holocaust,
missile crises and conflict, imperialism, - etc.
• Modern historians say Columbus didn’t “discover America” so much as he
led a march on their people while thinking he was in the Far East
• It’s a history of adaptation to the clash of cultures
• It’s history of connections – the shipping lanes brought the world together
• It’s not so much a history of success and failure as of persistence
• Source: Empire’s Crossroads, especially Introduction
5
Caribbean contributed to fundamental changes
“The Europe of today, it’s financial foundations built with sugar money and the factories and mills built as a result of the work of slaves thousands of miles away; the idea of true equality as espoused in 1794 Saint-Domingue; and even globalization and migration, with ships passing to and from taking people and goods in all possible directions, hundreds of years before the term ‘globalization’ was coined. The Caribbean contains all of this.”
6
Carrie Gibson, Empire’s Crossroads – A History of the Caribbean from Columbus to the Present Day, Atlantic Monthly Press, 2014, Pages 351- 352
Quote explains scope and significance of Caribbean’s contributions to
world.
The Europe of today, it’s financial foundations built with
sugar money and the factories and mills built as a result of
the work of slaves thousands of miles away; the idea of true
equality as espoused in 1794 Saint-Domingue; and even
globalization and migration, with ships passing to and from
taking people and goods in all possible directions, hunedreds
of years before the term ‘globalization’ was coined. The
Caribbean contains all of this.
6
Ways Caribbean influenced world
◼ France’s Haiti issues led to U.S. Louisiana Purchase
◼ Silver led to Spain’s downfall & wound-up in China
◼ African slave trade created conflict among nations
◼ Stirred U.S. North vs. South conflict over slavery
◼ Abolition of slavery led to China & India labor imports
◼ Sugar and tobacco created new consumption patterns in Europe
◼ Machinery needs for sugar boosted Industrial Revolution
◼ Source of Shah Jahan’s wealth for Taj Mahal
7
Ways Caribbean affected world affairs
• France’s Haiti issues led to U.S. Louisiana Purchase
• Silver led to Spain’s downfall & wound-up in China
• African slave trade created conflict among nations
• Stirred U.S. North vs. South conflict over slavery
• Abolition of slavery led to China & India labor imports
• Sugar and tobacco created new consumption patterns in
Europe
• Machinery needs for sugar boosted Industrial Revolution
• Source of Shah Jahan’s wealth for Taj Mahal
7
Significance of the Caribbean
8
• Larger than Mediterranean• Land area larger than UK• 44 million population - greater than Canada
• Significance of the Caribbean?
• 1) Size and population today:
• Larger than Mediterranean
• Land area larger than UK
• 44 million population - greater than Canada
• 2) Historical role globally
• 3) Transformation from subjugated islands to fledgling
independent countries and future as a wonderful area to cruise
and vacation
8
Melting Pot - unique culture surviving conquest, colonialism, slavery & imperialism
9
No other region of the world has such a mixture of cultures, religions, and peoples — Gibson, Empire’s Crossroads
Caribbean melting pot - unique culture surviving conquest,
colonialism, slavery and imperialism
◼ Inhabited by Scots, Irish, French, British, German, Portuguese, Spanish, Indians , Chinese, Javanese, Caribs, Lebanese, Syrians and Africans
◼ Mix of races and ethnic groups – each brought their own culture, religion and belief system
◼ Original Caribs and Arawak's decimated by overwork and disease
◼ European and African retentions are most dominant
◼ “No other region of the world has such a mixture of cultures,
religions, and peoples” — Carrie Gibson, Empire’s Crossroads
9
The Caribbean concoction
◼ 700+ islands, islets, and reefs
◼ 30 governments - 13 states and 17 territories
◼ Mix of ethnics - Afro-Caribbean, European, Indo-Caribbean, Portuguese, Hispanic, Chinese Caribbean, Jewish Caribbean, Middle Eastern-Caribbean, Amerindian
◼ Many tongues: Spanish, English, French, Dutch, Creole
◼ Gamut of politics
10
The Caribbean concoction
• 700+ islands, islets, and reefs
◼ 30 governments - 13 states and 17 territories
◼ Mixture of ethnicities - Afro-Caribbean, European, Indo-Caribbean, Portuguese, Hispanic, Chinese Caribbean, Jewish Caribbean, Middle Eastern-Caribbean, Amerindian
◼ Many tongues - Spanish, English, French, Dutch, Creole
10
The Caribbean: Empires’ Crossroads
“Ever since Christopher Columbus …, the Caribbean has been a stage for … competition between … British, French, Spanish, Portuguese, Dutch, Danish, and even the Swedes, Scots, and Germans…. Spaniards were the first to find prosperity … and extracted shipfuls of gold and silver, which English, French, and Dutch pirates were happy to seize. But precious metals weren’t a sustainable export—the colonizers needed something that was, and they would need hordes of slaves to cultivate it.”
11Source: Carrie Gibson, Empire’s Crossroads, 2014
• Carrie Gibson, “Empire’s Crossroads” because of the
many nations that have stakes in the area. This quote
gives a precise historical synopsis:
• Ever since Christopher Columbus …, the Caribbean has been a stage for competition between world powers. … British, French, Spanish, Portuguese, Dutch, Danish, and even the Swedes, Scots, and Germans sought their fortunes in the islands …. The Spaniards were the first to find prosperity … and extracted shipfuls of gold and silver, which English, French, and Dutch pirates were happy to seize. But precious metals weren’t a sustainable export—the colonizers needed something that was, and they would need hordes of slaves to cultivate it.
11
Source: Carrie Gibson, Empire’s Crossroads – A History of the Caribbean from Columbus to the Present Day, Atlantic Monthly Press, 2014 , flyleaf
12Political evolution of Central America and Caribbean
1st 300 yrs.: almost all Spanish
Today
After 400 yrs.: 16 polities, no Spain
13 states + 17 territories
Empire’s Crossroads
• Genocide, slavery, immigration and rivalry between world powers have given
Caribbean history an impact disproportionate to the size of this small region.
• 3 Maps highlight geopolitical evolution and role Caribbean played in the
colonial struggles of the European powers
• Initially, after Columbus and first 300 years was dominated by Spanish
indicated by red, with UK, Netherlands, France, and Sweden occupying
small areas
• By 1900s, were 16 colonies and independent states, but Spain no longer
present and British prominent
• In wave of decolonization after WW II, by 1983 UK role shrunk and US role
and Russia expanded
• Today, because of it’s proximity and size, US role is still important, but USSR
collapse and Rise of China, globalization and tourism makes the Caribbean
much different geopolitically - 30 governments - 13 states and 17 territories
12
Source: Territorial evolution of the Caribbean, From Wikipedia
Caribbean’s historic connections to world
◼ 500 years of colonization and conquest by Europeans and US
◼ Melting pot from all continents – especially Africa
◼ Exports of sugar, tobacco, and coffee produced by imported slaves
◼ Long struggles for freedom and development◼ Perilous moment of history – Cuban missile
crisis◼ Vacationland for millions
13
The Caribbean’s historic connections to the world
◼ 500 years of colonization and conquest by Europeans
◼ Melting pot of peoples from all continents – especially African slaves
◼ Exporter of sugar, tobacco, and coffee, etc. produced by imported African slaves
◼ Long struggles for freedom and development
◼ Dangerous moment of history - U.S. vs. Soviet Cuban missile crisis
◼ Vacationland for millions around the globe
13
Golden Age of Piracy (1660–1726)
◼ When Spanish declined and England, France and Dutch rose◼ Disasters in Old World bred opportunities in New World◼ 5,000 active pirates◼ When sanctioned (called privateering) to weaken Spain and
Portugal's monopolies ◼ Colonial powers cracked down in 1716-26, 500 pirates
executed and many imprisoned14
• When Spanish declined and England, France and Dutch rose• Disasters in Old World bred opportunities in New World• 5,000 active pirates• When sanctioned (called privateering) to weaken Spain and Portugal's
monopolies • Colonial powers cracked down in 1716-26, 500 pirates executed and many
imprisoned
14
Source: Piracy in the Caribbean. From Wikipedia
Most (In)Famous Golden Age pirates
15
Henry Morgan (1635-88)
Ann Bonny (1697-1782)and Mary Read (1685-1721)
Blackbeard (1680-1718)
Most Infamous Golden Age pirates• Henry Morgan (1635-88) – Bold and ruthless fought England's enemies,
became rich, captured and burned Panama City making a hero in England and nobleman
• Blackbeard ( 1680-1718)- pirated from NC –looked fiendish, killed by British off coast of NC
• Ann Bonny (1697-1782) and Mary Read (1685-1721): infamous female pirates ; ruthless; Not executed because of their claim of pregnancy
Source: Piracy in the Caribbean, From Wikipedia
15
Majority crossing Atlantic before 1820 were slaves who worked in sugar
16
% slaves into
New World
1500-1880
% African
descendents
in 1950
US and Canada 5% 31%
Mexico and Central America 2% 1%
Caribbean islands 43% 20%
Brazil 38% 36%
Other South America 12% 12%
◼ Sugar –deadliest and (useless) of crops
◼ 9.5 million African Slaves arrived
◼ 77% of all who crossed Atlantic before 1820 were slaves
◼ Majority worked in sugar
◼ Black survival differences explained by working in sugar
◼ 5% in US & Canada with 31% descendants in 1950
◼ 43% in Caribbean but only 20% descendants in 1950
16
What is Latin America?
17
4 areas (% population)1.Mexico (20%)2.Central (7%)3.Caribbean/WI (7%)4.South (66%)
What is Latin America?
Major areas
1. Mexico
2. Central America
3. Caribbean or West Indies
4. South America
17
18
Country
Population
( mil)
GDP(PPP)
bil $ GDP/Capita
Prosperity
Index
Ranking
Cuba 11.4 235$ 20,614$
Haiti 11.0 18$ 1,655$
Dominican Republic 10.8 157$ 14,556$
Puerto Rico 3.3 119$ 36,061$
Jamaica 2.9 24$ 8,172$
Total 39.4 553$ 14,038$
Population & GDP Major Caribbean
Countries, 2017
5 diverse countries with 3+ million population in Caribbean
• Different in size, wealth, and freedom
• Cuba -most population and largest economy
• Haiti - one of world’s poorest - same population but 1/8th GDP
of Dominican Republic
• U.S. territory Puerto Rico has highest GDP/capita ..but
suffered hurricane and near bankruptcy
18
Castro’s rise made communism a top issue of U.S. in Caribbean
19Fidel Castro and Soviet Premier Nikita Khrushchev in Cuba
◼ Castro’s rise made communism top issue of Latin American geopolitics until fall of USSR
◼ U.S. supported dictators such as Duvalier, Trujillo, Noriega, Batista
◼ U.S. and Soviet Union competed for influence during decolonization the 1950s and early 1960s
◼ Cuban Missile Crisis (Oct–Nov, 1962) was perhaps the most dangerous moment in world history
◼ Some easing of tensions now after Fidel’s death, but relations still in flux and embargo in place
19
20
Many religions and languages in Caribbean, but Catholicism and Spanish in majority
Many religions and languages in Caribbean, but Catholicism and Spanish
in majority
• 59% Catholic and 25% Protestant, and the remainder a smattering of
various traditional and imported religions
• Languages are equally diverse, but with Spanish the majority, and
English, second with French 3rd.
20
Shifting concoction of politics & religion
21
• Not only great diversity but a shifting one
• In 1950, hardly any democracies
• Since collapse USSR, predominately democracy
• Catholics still predominate, but shrinking as Protestantism expands
.
21
Islands progressing, but slowly
◼ Slow progress in democracy & prosperity
◼ Yet, not keeping pace with rest of world and rank mid-tier or lower – most rank 60+
◼ Island countries buffeted by global trends and geopolitics
◼ Each is fascinating and can benefit from growth of tourism in the Caribbean
22
Making progress, but pace is slow
◼ Caribbean countries are progressing in democracy, development and prosperity
◼ Made gains in most major social, economic and political indicators
◼ Yet, are not progressing as much of the rest of the world and rank as mid-tier or lower
◼ Thus, their world rankings are unchanged or declining and remain low
◼ They are small island countries buffeted by global trends and geopolitics
◼ Each island is fascinating and can benefit from growth of tourism in the Caribbean
22
Summary: Caribbean Concoction
◼ Ethnically and geopolitically diverse islands
◼ Suffered and shaped by 200+ years of colonization and slavery
◼ Historically, empire’s crossroads
◼ Key area of Cold War tension
◼ Expanding tourism industry
◼ Confronting major challenges and changes
23Lecture 2: Tues Dec 11, The Panama Connection
Conclusions: The Caribbean Concoction
• Ethnically and geopolitically diverse islands
• Suffered and shaped by 200+ years of colonization and
slavery
• Historically, empire’s crossroads
• Key area of Cold War tension
• Expanding tourism industry
• Confronting major challenges and changes
23
#2. Panama Canal Connection
Joe Coffeyjoecoffey@outlook.com
1.Origins of Panama2.History of Canal3.Expansion of Canal4.Impact of Canal5.Future of Canal
Welcome and Thanks for Coming
• As I am sure you are, I’m looking forward to this
crossing of the expanded canal
• Expanded canal is a very impressive feat by a rapidly
progressing country
• Panama is now a modern economic miracle
• The canal is a gateway to the new era of Connection
24
Panama Canal: “Largest, most costly single effort ever”
25
Source: David McCullough, The Path Between the Seas: the Creation of the Panama Canal 1870-1914, Simon & Schuster, 1977, page 11-12.
Panama Canal: “Largest, most costly single effort ever”
“It affected the lives of tens of thousands of people at every level of society and
virtually every race and nationality. …
France, was rocked to its foundations. … Columbia lost its most prized
possession the Isthmus of Panama. Nicaragua, on the verge of becoming a
world crossroads, was left to wait for some future chance. The Republic of
Panama was born. United States was embarked on a role of global
involvement.”
25
Panama’s place over 500 years◼ 1508: Balboa crosses Isthmus and “discovers” Pacific
◼ 1830: Becomes part of Colombia
◼ 1880s: French attempt to build canal fails
◼ 1900: United Fruit Company made a “banana republic”
◼ 1903: U.S. gets Colombia split & buys rights to build canal
◼ 1914: Panama canal completed & U.S. acclaimed
◼ 1968-1989: Military rule; Noriega on CIA payroll
◼ 1989: U.S. invades & ousts Noriega for drug trafficking
◼ 1991: Constitutional reforms and democracy
◼ 1999: Panama gets control of Canal and boost
◼ 2016: "Panama Papers" reveal Panama as a tax haven
◼ 2016 June 24: Expanded Panama Canal opened
26
Panama’s 500-year history – I won’t dwell on history or the canal per se but on
the role of canal in progress of Panama, U.S. and world.
1. 1508: Balboa Spanish explorer, governor, and conquistador crosses
isthmus and “discovers” Pacific
2. 1830: Becomes part of Colombia
3. 1846: Treaty with U.S. to build isthmus railway
4. 1880s: French attempt to build canal fails
5. 1903: Splits from Colombia; U.S. buys rights to build canal
6. 1900: United Fruit Company “banana republic”
7. 1914: Panama canal completed; U.S. widely acclaimed
8. 1968-1989: Military rule, Noriega on CIA payroll
9. 1989: U.S. invades and ousts Gen. Noriega for drug trafficking
10. 1991: Constitutional reforms and democracy
11. 1999: Panama takes full control of Canal
12. 2016: "Panama Papers" reveal Panama as a major sophisticated tax haven
13. 2016 June 24: Expanded Panama Canal opened
26<http://www.bbc.com/news/world-latin-america-19888936
Canal’s impact on Panama and World
◼ 1508: Balboa crosses Isthmus and “discovers” Pacific
◼ 1830: Becomes part of Colombia
◼ 1880s: French attempt to build canal fails
◼ 1900: United Fruit Company made a “banana republic”
◼ 1903: U.S. gets Colombia split & buys rights to build canal
◼ 1914: Panama canal completed & U.S. acclaimed
◼ 1968-1989: Military rule; Noriega on CIA payroll
27
Panama’s 500-year history – I won’t dwell on history or the canal per se but on
the role of canal in progress of Panama, U.S. and world.
1. 1508: Balboa Spanish explorer, governor, and conquistador crosses
isthmus and “discovers” Pacific
2. 1830: Becomes part of Colombia
3. 1846: Treaty with U.S. to build isthmus railway
4. 1880s: French attempt to build canal fails
5. 1903: Splits from Colombia; U.S. buys rights to build canal
6. 1900: United Fruit Company “banana republic”
7. 1914: Panama canal completed; U.S. widely acclaimed
8. 1968-1989: Military rule, Noriega on CIA payroll
9. 1989: U.S. invades and ousts Gen. Noriega for drug trafficking
10. 1991: Constitutional reforms and democracy
11. 1999: Panama takes full control of Canal
12. 2016: "Panama Papers" reveal Panama as a major sophisticated tax haven
13. 2016 June 24: Expanded Panama Canal opened
27<http://www.bbc.com/news/world-latin-america-19888936
Panama Canal Connection
28
Panama Canal - more than a short-cut between Atlantic and Pacific
• Panama Canal - more than engineered 48-mile short-cut
between Atlantic & Pacific
• Vital conduit of global exchange and progress – a dynamic
connection
• It’s expansion will multiply its significance
• Boost to the Caribbean by spreading even greater benefits of
trade.
• But, success not assured
• Globalization becoming more controversial & slowing
• Global warming may open alternative routes
28
Panama’s strategic importance
◼ Crossroads of North and South American and Atlantic and Pacific oceans
◼ U.S. supported its secession from Colombia in 1903, and secured zone to build Canal - that was under U.S. control from 1914 until 1999
◼ U.S. invaded Panama in 1989 to depose a former ally, military ruler Manuel Noriega
◼ 15,000 vessels pass annually
◼ Supports growing economy of 4 million
29
Panama’s strategic importance
◼ Crossroads of North and South American continents and Atlantic and Pacific Oceans
◼ U.S. supported its secession from Colombia in 1903, and secured zone to build the Panama Canal - which remained under U.S. control from 1914 until 1999.
◼ U.S. invaded Panama in 1989 to depose a former ally, military ruler Manuel Noriega
◼ 15,000 vessels make eight-hour Canal journey annually
◼ Supports Panama’s growing economy of 3.9 million people
29
Impetus for Panama Canal
30
Impetus for Original Panama Canal
◼ Interest in canal began in 16th Century
◼ 1848 discovery of gold in California added interest
◼ British, French and U.S. interested
◼ Shipping magnate Cornelius Vanderbilt tried a canal across Nicaragua but gave up in 1840s
◼ Frenchman, Ferdinand de Lesseps, of Suez Canal fame, started Panama Canal Co. and also gave up
◼ U.S. President Theodore Roosevelt’s “Big Stick” diplomacy helped Panama break from Columbia and got the right to build the canal in 1903
30
Panama’s secret? Geography!
31
Panama’s secret? Geography!
◼ Spanish conquistadors used Panama to transport gold and silver from Peru to Spain
◼ Ports on each coast and a trail between them handled much of Spain's colonial trade
◼ Panama depended on (cyclical) world commerce
◼ Boomed in 1850s thanks to traffic associated with California gold rush
◼ 1855 railroad across the isthmus prolonged growth until first transcontinental railroad in U.S.
◼ Canal efforts of France in 1880s and U.S. early 1900s stimulated Panama during construction and after completion in 1914
31
Opening signaled U.S. as superpower
32
“Far better is it to dare mighty things ... than … neither enjoy nor suffer much…” - Teddy Roosevelt
Teddy
“On August 15th, 1914, the Panama Canal opened, …signaling America’s emergence as a global superpower. American ingenuity and innovation had succeeded where …the French had failed disastrously. But the U.S. paid a price for victory: … the largest single federal expenditure in history to that time -- and the loss of more than 5,000 lives. Along the way, Central America witnessed the brazen overthrow of a sovereign government, the influx of over 55,000 workers from around the globe, the removal of hundreds of millions of tons of earth, and engineering innovation on an unprecedented scale. The construction of the Canal was the epitome of man’s mastery over nature and signaled the beginning of America’s domination of world affairs.”
32
Source:pbs.org/wgbh/americanexperience/features/introduction/panama-intro/>
Canal: key shipping route & choke point
33
Panama is major global shipping route and choke
point
• This chart of shipping routes neatly summarizes Panama’s
global significance
• It’s far beyond a country of 4 million that has a somewhat
checkered past
• Panama’s has an impressive recent modernization
.
33
Ruchir Sharma, The Rise and Fall of Nations – Forces of Change in the Post-Crisis World, Norton, 2016, p 402-3
Canal is major oil transit choke point
34
Panama is major global shipping oil transit choke
point
• It is one of the world’s greatest choke points – like the Suez
Canal, Malacca Straits, Hormuz Strait, Strait of Malacca,
Turkish Straits/Bosporus, and Strait of Gibraltar.
34
Panama fastest growing incomes in hemisphere
35
Panama the fastest per capita GDP growth in hemisphere
• Panama City, with a population of 1.7 mil., has very
impressive skyline
• Now richest country in Central America – surpassing Costa
Rico and world average
• Even GDP/capita 50% higher than her mother country –
Columbia
• Poverty has been reduced, although it still has high inequality
• Recently it has gained notoriety from the Panama papers
disclosure, which is a back-handed way of revealing its
sophistication in banking, insurance and finance
• Growth has been fueled by the construction sector,
transportation, port and Panama Canal-related activities, and
tourism
35
Despite prosperity: Struggling education system and poverty remain
◼ Needs to improve its struggling education system and social services for poor
◼ 21% below national poverty line in 2014
◼ Poverty double in rural communities, 41%
◼ Public education system ranked 94th
◼ Only 67% of primary and 84% of middle schools have electricity
◼ But, thanks to strong growth, declining poverty
36
Despite prosperity: Inequality, poverty and a failing
education system remain
◼ Needs to improve its struggling education system and social services for poor
◼ 21% below national poverty line in 2014
◼ In rural communities, 41%
◼ Public education system ranked 94th
◼ Only 67% of primary and 84% of middle schools have electricity
◼ But, thanks to strong growth, declining poverty
36
Source: Panama’s Pivot: Canal Expansion as a Catalyst for Social Stimulus? July 12, 2016, by Maria Fabrizio and Zachary Cohen, Council on Hemispheric Affairs
Canal’s big impact on Panama
◼ Canal $2.2 billion toll revenues in 2017 and contributed about $0.9 to Panama
◼ Employed of 9,900
◼ 2018 record tonnage of 442 mil. - 9.5% increase
37
Canal’s impact on Panama
◼ Been a cornerstone of global trade
◼ Net profits in 2015 were $1.36 billion
◼ Employment of 9,900
◼ GDP per capita increased from $7,600 to $16,500 from 2000 to 20013
◼ Expansion cost of $5.25 billion = 50% of one year’s worth of federal spending
◼ Keeps canal relevant in the expanding global economy
◼ Large containership Paid Nearly $1 Million Toll to Cross the Expanded Panama Canal
37
Source: Panama’s Pivot: Canal Expansion as a Catalyst for Social Stimulus? July 12, 2016, by Maria Fabrizio and Zachary Cohen, Council on Hemispheric Affairs
Expansion Project
1. Deepening and widening Atlantic entrance
2. New approach channel for Atlantic Post-Panamax locks
3. Atlantic Post-Panamax locks
4. Raise Gatum water level
5. Widening and deepening channel of Gatum Lake and Culebra Cut
6. New approach channel for Pacific Post-Panama locks
7. Pacific Post-Panamax locks
8. Deepening and widening Pacific entrance
38
Impacts of Panama Canal Expansion
◼ 9-year, $5.4 billion project is critical to Western trade
◼ Canal handles a 6% of global trade (340 million tons)
◼ Accommodate larger ships and doubles Canal’s cargo capacity
◼ Alleviates bottleneck caused by smaller ships
◼ Makes it more competitive with Suez
◼ Cuts voyage from Asia to U.S. East Coast by 5 days
38
$5+ Bil. Expansion Project
39
Canal Expansion
• The Panama Canal expansion project - doubled the capacity by
adding a new lane of traffic allowing for a larger number of ships
• New ships are one and a half times the previous and can carry over
twice as much cargo.
• Bigger ships - locks are 70 feet wider and 18 feet deeper than originals
• Began commercial operation on 26 June 2016.
• New locks create a third lane of traffic and double cargo capacity
• Improved water efficiency due to recycling
39
https://www.pancanal.com/eng/pr/press-
releases/2016/08/15/pr606.html>
The Expanded Panama Canal: A Risky Bet?
◼ Bargain-price low bid by a billion dollars may have taken shortcuts
◼ Safety, quality of construction and economic viability in doubt
◼ Hopefully, sufficient water will be found, concrete will last, big ships will come, and Panama will celebrate
◼ Success may be undercut by a slowdown in global trade or opening of new Artic routes
◼ China is even considering a Nicaragua route
40
The Expanded Panama Canal: A Risky Bet?
◼ Much growth in tonnage due to US Imports from China –question if that will continue
◼ China slowing too◼ The opening of the Russian Northern Sea Route and the Canadian
Northwest Passage to commercial traffic could pose an alternative to the
canal in the long term.
◼ Large ships via new locks cost close to $1 mil.
◼ Depends on size – big cruise ship may cost $1/2 mil.
40
The New Panama Canal: A Risky Bet, By WALT BOGDANICH, JACQUELINE WILLIAMS and ANA GRACIELA MÉNDEZ, New York Times, JUNE 22, 2016
Proposed Nicaragua Canal in limbo
41
• The Nicaraguan Canal - proposed shipping route through Nicaragua to
connect the Caribbean with the Pacific Ocean
• Construction of a canal was first proposed by US but abandoned after
purchased the French interests in the Panama Canal.
• In June 2013, Nicaragua approved a grant a 50-year concession to finance
and manage the project to a Chinese billionaire.
• In 2015, media reports of delay due to Chinese stock market crash
• In February 2018, analysts widely viewed the project as defunct, though
Nicaraguan government indicates that it will go ahead with land expropriations
41
42
China largest to Latin America
China's President Xi Jinping and Panama’s President Juan Carlos Varela in Panama, Dec 3, 2018
• China now larger lender to Latin America than US or World Bank, inks deal with
• Panama and China signed 19 cooperation agreements on trade,
infrastructure, banking, tourism after the two countries opened diplomatic ties
last year.
• Panama awarded a Chinese consortium a $1.4 billion contract to build a
bridge over the Panama Canal, a day after a visit by President Xi Jinping.
• China has committed US$150 billion in loans to the region since 2005 - than
the US
• China and Panama now negotiating a free trade agreement that could see
even more Chinese goods move through the canal.
• Is China displacing the United States? China is the second most frequent user
of the Panama Canal behind the United States. China has made loan
commitments exceeding US$150 billion in Latin American and Caribbean
countries since 2005, eclipsing loans from the US and the World Bank.
• This is in addition to around US$114 billion in equity investment from China
during the same period
• China’s growing pull in Latin America could have wide-ranging impacts.
• What happens if countries can’t pay the loans back? China may take over the
projects as it has in Sri Lanka
42
Source: www.voanews.com/a/panama-china-sign-accords-on-xi-visit-after-diplomatic-ties-start
Future of world (despite of nationalism)?Transportation & connectivity
◼ “Transportation dominates our daily existence. Thousands, even millions, of miles are embedded in everything we do and touch.” -- Edward Humes, Door to Door: The Magnificent,
Maddening, Mysterious World of Transportation, Harper Collins, 2016
◼ “[The future will be] shaped less by national borders than by global supply chains, a world in which the most connected powers—and people—will win. … Connectivity, not geography, is our destiny.” -- Parag Khanna,
Connectography: Mapping the Future of Global Civilization, Random House, 2016
43
But the future is connectivity (despite
nationalism?)
◼ “Transportation dominates our daily existence. Thousands, even millions, of miles are embedded in everything we do and touch. We live in a door-to-door universe ….” -- Edward Humes, Door to Door: The Magnificent,
Maddening, Mysterious World of Transportation, Harper Collins, 2016
◼ “[The future will be] shaped less by national borders than by global supply chains, a world in which the most connected powers—and people—will win. … Connectivity, not geography, is our destiny.” -- Parag
Khanna, Connectography: Mapping the Future of Global Civilization, Random House, 2016
43
Conclusions: The Panama Canal Connection
◼ Panama Canal – vital to Panama’s & World Security and Prosperity
◼ U.S. engineering & geopolitical triumph, but also diplomatic black eye
◼ Cut transport costs and fostered global growth
◼ Now, globalization and trade being challenged, so success of expansion not guaranteed
◼ On balance, risk worth taking & it makes a great cruise!
44Next #3: Dec 13: What Has South America Done?
Conclusions: The Panama Canal Connection
◼ Panama Canal – major impact on world for over a century
◼ Been a engineering triumph, but often a diplomatic fiasco
◼ Has reduced transport costs and enhanced economic growth
◼ Globalization now under the gun, so expansion is risky
◼ If successful, will boost global trade and Panama
◼ Transportation and connectivity key to future
44
Dec 12: #3 What has Latin America Done?
(Impact on world)
Joe Coffeyjoecoffey@outlook.com
What Has Latin America done?”
• Welcome – thanks for coming – after yesterdays delay and slides
wouldn’t project
• Apologize to all of you and NCL
• Hope to do better today
• As in this picture, much of Latin America has been hidden from view,
and attention focused on North America
• But, European discovery of Americas - most significant events in human
history
• My objective is to give you a better appreciation of what Latin America
has done - it’s contributions and impacts over 500 years
45
How does Latin America compare with World
Powers?
46
Latin
America EU US China
Area (mi sq mi) 7.4 1.7 3.5 3.7
Population (mil) 639 513 326 1,400
GDP (PPP, tril$) 10 22 19.4 25.2
GDP/capita (PPP) 15,600 43,100 59,500 18,100
• Latin America is huge area
• Double size of US
• Bigger than US & EU combined
• As big as US & China combined
• Obviously has much potential to grow
• It’s also has large population – double US and bigger than EU, but under half
of China’s
• But despite large size and population – has undersized economy
Many impacts on World (4 Ss)
1. Silver and gold
2. Slavery
3. Sugar
4. Smokes (Tobacco)
5. Columbia Exchange
6. Panama Canal
7. Cold war/Cuban missile crisis
8. Vacation land
9. China’s influence
47
Many impacts on World (4 Ss)
Jared Diamond – Guns, Germs and
Steel
1. Silver and gold
2. Slavery
3. Sugar
4. Smokes (Tobacco)
5. Columbia Exchange
6. Panama Canal
7. Cold war/Cuban missile crisis
8. Vacation land
9. China’s influence
47
What has Latin America done (to the world)?
◼ European discovery of Americas -one of most significant events in history
◼ Realigned world thought, commerce and humanity
48
• European discovery of Americas - one of most significant events in history
• Realigned world thought, commerce and humanity
48
Reversed 3 great historical trends
1. World balance of power: Gradually shifted from China to Western Europe
2. Revolutionized religion: Making New World largely Christian
3. Evolution reversed from divergence to convergence: Shifted species back and forth, wiped out millions of Americans and changed demographic profile of world
49Felipe Fernandez-Armesto, Ideas That Changed the World, DK Publishing, 2003, pages 219.
1. World balance of power: Gradually shifted from China to Western
Europe
2. Revolutionized religion: Making New World largely Christian
3. Evolution reversed from divergence to convergence: Shifted
species back and forth, wiped out millions of Americans and
changed demographic profile of world
49
Felipe Fernandez-Armesto, Ideas That Changed the World, DK Publishing, 2003, pages 219
Spanish Colonization of Americas
50
• Why? Trade & spread of Catholicism
• Consequences?• 2 mil. Spaniards settled • Indigenous deaths • Spain’s golden age 16 & 17 c.• Silver & gold from America
financed European wars• Spain’s disastrous attempt to
invade England
• Americas in Spanish Empire, except Brazil, Canada and other small
countries in Latin America
• Why? For trade and spread of Cat holism after Columbus in 1492
• During the colonial period (1492–1832), nearly 2 million Spaniards
settled in the Americas and a further 3.5 million immigrated during the
post-colonial era (1850–1950)
• Spain enjoyed a cultural golden age in 16th and 17th centuries when
silver and gold from America financed European and North African wars
– including laying waste to Netherlands and disastrous attempt to invade
England.
50
Impact on European outlook: Fourth part of the world!
51Martin Waldseemuller and Matthias Ringmann – Map 1507
America
Europe
Africa
Asia
• For millennia Europeans believed that the world consisted of three parts:
Europe, Africa, and Asia.
• In 1507 two obscure scholars working in France, after reading about the
Atlantic discoveries of Columbus’s contemporary Amerigo Vespucci, came to
a startling conclusion: Vespucci had reached the fourth part of the world. …
[A]nd in Vespucci’s honor they gave this New World a name: America.
51
Toby Lester, The Fourth Part of the World, Free Press, 2009, flyleaf
52
Impact on agriculture & health
The Columbia Exchange
• Columbia exchange – two-way flow of plants and animals that supported
population in both hemispheres.
• Potatoes from Peru that fed the Irish is a classic example of the food
sources gained from Latin America.
• Sugar and livestock transferred from Europe big impact on Latin
America
• Communicable diseases - unintended byproduct caused massive
declines in indigenous peoples
52
Impact on global economy: Shifted world economic
balance
◼ Suppose Columbus was right and world was small and no America.
◼ Western Europe would have remained a small, backward region of Eurasia, dependent on the East for technology, culture, and wealth.
Felipe Fernandez-Armesto, The Americas, A Hemispheric History, The Modern Library Paperback Edition,
New York, 2005, pages 81-82.53
• Columbus miscalculation: world was 25% smaller than it really is.
• Suppose Columbus was right and world was small and no America.
• Western Europe would have remained a small, backward region of
Eurasia, dependent on the East for technology, culture, and wealth.
• Instead, Americas was one of the greatest economic transformations.
53
Impact of Silver Extraction: $ 530 bil. enriched world but 8
million died in mines
54
Silver from LA impacted entire world
◼ 300 years of $530 bil. Silver exports
◼ 60% to Europe
◼ 20% to Asia
◼ $20% remained in Americas
◼ Spain boomed and then busted thanks to warring and extravagance
◼ Little silver wealth stayed in Spain
◼ Silver produced a new global monetary system
◼ Silver gave Europe wealth to trade with China and aided European development
◼ Tragically, 8 million natives died in Spanish mines
54
Impact of slave trade: Changed
society, economy & demographics
55
◼ Slaves mainly West Africans
◼ Immunity to Malaria, yellow fever, and European diseases
◼ Death – of 25-85% of natives –small pox & measles
◼ Demand for sugar, cotton and tobacco –labor intensive crops
◼ Slaves largest immigrants Americas before late 1700s
◼ More slaves to South America than to North America
◼ When banned in 1853, 15.3 million slaves to Americas
55
https://en.wikipedia.org/wiki/Atlantic_slave_trade>
56
• Impacted Industrial Revolution in Britain
• Aided British economy by producing cheaper cotton and sugar
• Slave trade profits gave the British economy an extra source of capital
• New world export markets for British manufactures
• Other factors: 3 c’s – coal plus cotton and colonies not only from America but
Asia –especially India
• Others: progress of agriculture & technology, political stability, and culture of
enterprise
56
57
Impact of slavery on Africa
• Impact greatest in West Africa, which supplied most captives
• Destroyed traditional cultures
• Loss of workforce led to famines
• Put war lords in control & increased warfare
• Social impacts – loss of males
• But African economy little benefit
• Poisoned political landscape of Africa and set disturbing precedents
• But only half slaves crossed Atlantic - 8 million kept in Africa & 6 million
sent to Asia
57
Impact of Sugar
58
Impact of Sugar
◼ Sugar mills helped fuel Industrial Revolution
◼ Sugar, once for rich, became common among poor
◼ By 1750 sugar was most valuable commodity in European trade
◼ Sugar made Cuba richest in Caribbean by 19th c
◼ Tragic, two of largest exports – sugar and tobacco- not necessary for life, indeed harmful to health
58
From <https://en.wikipedia.org/wiki/History_of_sugar>
Impact of tobacco
59
59
• Tobacco discovered by natives and spread to world by 1528
• Basic commodity – used as a currency in the colonies
• Profitability increased shift in colonies to a slave based labor force
• Expansion accelerated economic growth in America
Impact of Colonization
60
• Colonization had major impact in Latin America – and rest of world
• Shifted priority from locals to colonizers
• Resources and profits extracted
• Colonies were new market for manufactures
• Scholars still debate long-term impacts:
• Colonization's lasting impacts: greater inequality, weakness of self
government, late industrialization, interdependence on outside world rather
than internally
60
Impact on Cold War
61Khrushchev & Kennedy during Missile Crisis, Oct ‘62
How many of you remember the Cuban Missile crisis?
• Castro’s Cuba turned communist
• U.S. and Soviet Union fought proxy wars as they vied for Latin allegiances
• Cuba is one of few communist countries remaining
• Cuban missile crisis of Oct 16-28, 1962 – most dangerous moment of Cold
War
• Communist threat sparked dozens of U.S. used threats, invasions and
embargoes
61
Impact of China
62
• Interdependence of China and Latin America
• China now leading trade partner & investor
• Larger than US or World Bank
• Has even explored building a new canal
• Major political influence – especially in Venezuela, Cuba, and Bolivia
• Economic slowdown of China and globalization, plus growing Western concerns of China’s motives are dampening China’s influence – at least temporarily
62
Jan 21, 2016 by Wei HSU, .linkedin.com/pulse/entangled-dependence-between-china-latin-america-wei-hsu>
Impact on International Tourism
63
Impact on International Tourism : 80 million international travelers
• 24 million cruisers
• Rapidly expanding – nearly 2x rate of world (7% vs. 4%)
• Offers multiple attractions: cruises, sailing, eco-tourism, fishing, parks,
Carnivals, historical, music …
• Important economically 10-15% of economy - $400 bil. industry
• Latin American tourists will be traveling more in the near future
• Peru is the up and coming tourist location
63
Latin America today?
◼ Ethnically very diverse
◼ Middling prosperity
◼ Volatile politically & economically
◼ Abundance of natural resources
◼ Ocean access - limited internal commerce
◼ Income inequality
◼ Extremes of governance64
What are Latin America’s major features today?
• Ethnically very diverse
• Middle of the pack prosperity
• Volatile politically and economically
• Not fully democratic
• Natural resource abundance
• Access to oceans – not land-locked
• Limited internal commerce and connections
• Income inequality
• Extremes of governance
64
Conclusion: Latin America realigned the world
◼ Impact on ideas, institutions and lives
◼ Influential: trade, geopolitics & tourism
◼ Undervalued and unappreciated
◼ Stay-tuned: I will provide insight and perspective of this great region
65
Saturday, Dec 15: #4 Cuzco, Peru: Capital of Incas & Lost City of Machu Picchu
Conclusion: Latin America realigned the world
• Historic impact on ideas, institutions & lives
• Remains influential – in trade, geopolitics, and tourism
• As we’ll seen – major changes underway and more to come
• Undervalued and appreciated
• I hope my presentations will provide insight and perspective
• Dec 15: #4 Cuzco, Peru: Capital of Incas & Lost City of Machu
Picchu
65
#4: Cuzco, Peru: Sacred Capital of Incas & Legendary Lost City of Machu Picchu
I. Why a great empire?
II. How did she rise?
III. How did she fall?
IV. How she fared?
• Thanks for coming -
• Despite delays and no slides Lecture 2 – have been great audience
• Appreciate kind remarks
• NCL staff support has been great
• Topic is Cuzco & Machu Picchu – fascination for 50 years
• Did PhD on Cuzco
• Today -Focus on Cuzco and Incas – not pre Inca or Modern Peru
• Basic questions addressed
I. Why a great city?
II. How did she rise?
III. How did she fall?
IV. How she fared?
66
67
Salaverry
Cuzco
Lima
World rankings
Size: 19Population: 43Economy: 36GDP/capita 85
Area : 496,225 sq mi) (19th)
Population 32,. Million (43rd)
GDP (PPP)
$450.148 billion[4] (36th)
• Per capita
$13,993[4] (85th)
World ranking
Size 19th
Population 43rd
Economy 36th
Income/capita 85th
67
Major Eras of Peru
◼ Moche near Salaverry (100-700)
◼ Chimu near Trujillo (900-1450)
◼ Inca Empire at Cuzco (1197-1532)
◼ Spanish Colonization (1532-1824)
◼ Independence by Bolivar (1824)
◼ Bolivia becomes independent of Peru (1825)
◼ War of Pacific with Chile (1879-84)
◼ Current Era
◼ Inflation & Shining Path insurgence (1980-95)
◼ Political instability/unpopular Presidents, but prosperity gains (1995-2018)
◼ VP Vizcarra assumes office (March 2018)68
◼ My lecture –Incas, but this places in context
◼ Northern coast cultures preceded Incas
◼ Incas at Southern Andean Mountains, now on central coast of Lima
◼ Moche near Salaverry (100-700)
◼ Chimu near Trujillo (900-1450)
◼ Inca Empire at Cuzco (1197-1532)
◼ Spanish Colonization (1532-1824)
◼ Independence by Bolivar (1824)
◼ Bolivia becomes independent of Peru (1825)
◼ War of Pacific with Chile (1879-84)
◼ Current Era
◼ Inflation & Shining Path insurgence (1980-95)
◼ Political instability/unpopular Presidents, but prosperity gains (1995-2018)
◼ VP Vizcarra assumes office (March 2018)
68
Chronology of Inca Empire & Cuzco
◼ 1197: Manco Cápac begins city-state at Cuzco
◼ 1438: Inca Empire- Sacsayhuamán & Machu Picchu are built
◼ 1532: Pizarro massacres Incas & makes Lima capital
◼ 1572: Tupac Amaru, last Inca emperor, executed
◼ 1780: Tupac Amaru II, last Inca descendent killed after failed revolt
◼ 1824: Peru last colony in South America to gain independence from Spain
◼ 1919: Hiram Bingham discovers Machu Picchu
69
1197: Manco Cápac begins city-state at Cuzco
1438: Inca Empire- Sacsayhuamán & Machu Picchu are built
1532: Pizarro massacres Incas & makes Lima capital
1572: Tupac Amaru, last Inca emperor, executed
1780: Tupac Amaru II, last Inca descendent killed after failed revolt
1824: Peru last colony in South America to gain independence from Spain
1919: Hiram Bingham discovers Machu Picchu
69
70
Cuzco Landmarks
Plaza de Armas
Temple of Coricancha
Sacsayhuamán, Cathedral of Cuzco
Aerial view of Cuzco
Cuzco Landmarks
◼ Sacred capital of Incas – center of world
◼ Impressive Inca structures
◼ Sacsayhuaman -- fortress with incredible stones
◼ Machu Picchu – legendary Inca city (discovered 1911)
◼ Archeological capital of Americas
◼ Americas oldest continuously occupied city
◼ UNESCO World heritage site
◼ Historic capital of Peru
70
◼ In early 14th century, 100,000 Incas at Cuzco using diplomacy and military power dominated 10-12 million
◼ Expanded their domain in 1438 by rapid conquests
◼ By 1463 Incas dominated southern Peru
◼ In 1470s they took Peruvian coast and Ecuador
◼ In 1493-1526 they expanded into jungle, Ecuador, and frontiers of Bolivia and Argentina
71World’s largest empire 1500
I. Why great?
• 500 years ago world’s largest
• Stretched 3,000 miles along Andes
◼ Used diplomacy and military to dominate 10-12 million
• Cuzco centered
• Sedentary - and hierarchical
• Had established strictures and religion
71
Terence N. D’Altroy, The Incas: Inside an American Empire Course Guide, Recorded Books, 2004
◼ 8,000 ft. high amazing urban setting
◼ Sanctuary for Inca emperor (1438–72)
◼ “Discovered” in 1919 by historian Hiram Bingham
◼ UNESCO World Heritage site72
Machu Picchu
I. Why great?
Amazing Machu Picchu in Magnificent mountain setting
• 8,000 ft. high amazing urban setting
• Sanctuary for Inca emperor Pachacuti (1438–72)
• “Discovered” in 1911 by historian Hiram Bingham
• UNESCO World Heritage site
72
73
Machu Picchu: 200 structures, terraced
I. Why great?
• About 750 people lived there with 200 structures
• Was religious, ceremonial, astronomical and agricultural centre – though
exact role unknown
• Divided into a lower farming and upper residential areas with a large square
between
• Tho only 50 miles from Cuzco, not found by Spanish
• Most visited site in Peru
73
◼ Fortress on outskirts of Cuzco
◼ Stone walls of 200-ton boulders tightly fitted
◼ Large plaza area for ceremonies and rituals
◼ Storage rooms for military equipment
74
SacsayhuamanI. Why great?
Sacsayhuaman
• Fortress complex on outskirts of Cuzco
• Stone walls of massive boulders tightly fitted without mortar weighing as much
as 200 tons
• Large plaza area for ceremonies and rituals
• Storage rooms for military equipment
74
75
I. Why great?
Spread of Inca Empire
Start & spread of Inca Empire
◼ In early 14th century, 100,000 Incas at Cuzco
◼ Expanded in 1438 by rapid conquests
◼ By 1463 Incas dominated southern Peru
◼ In 1470s they took Peruvian coast and Ecuador
◼ In 1493-1526: expanded into jungle, Ecuador, Bolivia and Argentina
75
76
Farming terraces to top of mountain
Llamas - beast of burden, fine hair & meat
II. How rise?
• Incas performed farming miracles
• For a farm boy from Indiana, US, the farming could not be more different
• Terraces and small plots from bottom to top
• No horses, tractors, trucks – only sure-footed , multipurpose Llamas
• Country restaurants – Guinea pigs hanging from rafters
76
Inca Ideology
◼ Polytheistic
◼ Animistic (things in nature have souls)
◼ Spirits inhabited landscape
◼ Human sacrifices
◼ Listened to mummies
◼ Kinship very important
◼ Royalty had formal education
77Terence N. D’Altroy, The Incas: Inside an American Empire Course Guide, Recorded Books, 2004
II. How rise?
Inca Ideology
◼ Polytheistic
◼ Animistic (things in nature have souls)
◼ Spirits inhabited landscape
◼ Human sacrifices
◼ Listened to mummies
◼ Kinship very important
◼ Royalty had formal education
77
Terence N. D’Altroy, The Incas: Inside an American Empire Course Guide, Recorded Books, 2004
Incan Belief System
◼ Founder Manco Cápac
◼ Son of creator god Viracocha
◼ Sun for a crown
◼ Thunderbolts in hands
◼ Tears as rain
◼ Beliefs based on solar events tied to agricultural cycles
78Viracocha
II. How rise?
Incan belief system
Founder Manco Cápac
Son of creator god Viracocha
Sun for a crown
Thunderbolts in hands
Tears as rain
Beliefs based on solar events tied to agricultural cycles
78
79
Inca militarily key to power: army of 100,000, network of garrisons, roads & depots
II. How rise?
• Excelled at warfare
• Used conscripts who used their own weapons and leaders
• Could field an army of 100,000
• Created a network of garrisons, paved limited access roads and depots
• Positioned self-contained strongholds to stake out territory
• Soldiers accompanied by wives and servants
• One king accompanied by 2,000 wives leaving another 6,000 behind
• In later years, shifted strategy from territorial expansion to pacification
79
Terence N. D’Altroy, The Incas: Inside an American Empire Course Guide, Recorded Books, 2004
80
Inca Political Organization
II. How rise?
Inca Political Organization
• Empire divided into “Four Parts Together”
• Must maintain place in Cuzco
• Policies not standardized, local prerogatives
• Rule passed from father to son
• Monarch married his sister for purity of bloodline
• Queen, had powerful roles and influences
• Dead monarchs were mummified so could still be involved in political affairs
80
Terence N. D’Altroy, The Incas: Inside an American Empire Course Guide, Recorded Books, 2004
Inca Provincial Rule
◼ Census records in knots (Khipu)
◼ No formal legal code but strictures against theft, disobeying the ruler, etc.
◼ Empire of 2,000 provincial centers with 25,000 miles of road connecting them
◼ Some roads paved with access limited and relay messenger stations
◼ Subjects relocated to better serve Incas
81Terence N. D’Altroy, The Incas: Inside an American Empire Course Guide, Recorded Books, 2004
II. How rise?
◼ Took a census and used a knot-record system (Khipu) that’s still not decoded
◼ No formal legal code but strictures against theft, disobeying the ruler, etc.
◼ Empire broken into 2,000 provincial centers with 25,000 miles of road
◼ Some roads paved with access limited and relay messengers stationed every few miles
◼ Subjects relocated to be more efficient and better serve the Incas
81
Terence N. D’Altroy, The Incas: Inside an American Empire Course Guide, Recorded Books, 2004
82
II. How rise?
Inca economy: extractive, non-market, socialistic, state ownership and vast farms
Inca economy: extractive, non-market, socialistic, state ownership and vast
farms
◼ Markets and coinage little used
◼ Labor tax supported Empire
◼ Male heads required to work for Incas 2+ months
◼ Vast farms - 14,000 workers & herds of millions
◼ Colonies specializing in farming, artisans, etc.
◼ Weaving, textiles & stone working most valued
82
83
Pizarro’s 168 conquerors slaughtered 7,000 Incas at Cajamarca (14 Nov 1532)
III. How fall?
Pizarro had just 60 horsemen and 90 foot soldiers…. The population of the
empire they intended to subjugate was somewhere between 5 and 10 million.
On the conquistadors side, however was an invisible ally: the European
diseases to which South Americans had no resistance…. Spaniards’ horses,
guns and crossbows were weapons far superior …; they gave the invaders a
terrifying extra-terrestrial aspect. And the Incas themselves were divided.
…[Half-brothers] Atahualpa and Huascar had been battling for the succession….
The battle of Cajamarca (14 November 1532) was thus scarcely a battle at all….
Atahualpa walked into a trap when he accepted the Spaniards’ invitation to
dinner… [The] Spaniards killed the panic-stricken Indians “like ants”.
83
84
• Conquest of Incas crucial for colonization
• Boosted by bullion• Sagged as silver
depleted• Dissolved by
Peru’s 1821 Independence
Pizarro and his followers in Lima in 1535
IV. How fared?
Silver "went round the world and made the world go round.”
•Spanish conquest of Inca Empire crucial for colonization of the Americas. •Took decades of fighting but ended with capital at Lima•Indigenous population collapsed due to exploitation, socioeconomic change and epidemic diseases • in 1570s with gold and silver mining by forced labor•Peruvian bullion provided revenue for the Spanish Crown and fueled a complex trade network that extended as far as Europe and the Philippines•Churches replaced Inca temples and used torture to ensure faithfulness•By 18th century, declining silver so Spaniards and their creole successors seized lands •Eventually, the viceroyalty would dissolve in face of national independence movements at the beginning of the nineteenth century.
84
Incas after massacre & conquest
◼ Ruler Atahualpa killed
◼ But Incas harassed Spaniards
◼ 1572 finally subdued: last Inca ruler executed
◼ Ended lineage Incas believed descended from Sun to rule Earth
85Terence N. D’Altroy, The Incas: Inside an American Empire Course Guide, Recorded Books, 2004
IV. How fared?
Incas after massacre & conquest
• Ruler Atahualpa killed
• But Incas harassed Spaniards
• 1572 finally subdued: last Inca ruler executed
• Ended lineage Incas believed descended from Sun to rule Earth
85
Harsh Spanish extractionFirst: Looting, gold and silver lust
Then: Extract all but bare subsistence
◼ Expropriate land
◼ Forced work
◼ Low wages
◼ High taxes
◼ Charge high prices
Consequence: Income inequality: conquistadors rich; natives poor;
86Source: Daron Acemoglu and James A. Robinson, Why Nations Fail, Crown, 2012, Pages 18-19
IV. How fared?
“After … looting, and gold and silver lust, the Spanish …force[ed] indigenous peoples living standards down to a subsistence level and thus extract all the income in excess of this for Spaniards … by expropriating their land, forcing them to work, offering low wages …, imposing high taxes, and charging high prices for goods that were not even voluntarily bought. Though these institutions generated a lot of wealth for the Spanish crown and made the conquistadors and their descendants very rich, they also turned Latin America into the most unequal continent in the world and sapped much of its economic potential.”
86
Conquest of Incas set tone for next several centuries
87
IV. How fared?
Encomienda system
Encomienda system
◼ Vast domains to conquistadores – actually not the land but labor of natives
◼ Land was to remain Crown property, but evolved into hereditary haciendas
◼ Conquistador class became idle rich and rest left with tiny plots of land
◼ Because of Encomienda system, Spanish felt no need to import indentured labor
◼ Upshot was no upward mobility
87
Niall Ferguson, Civilization, pages 112- 114
Devastating Spanish rule & legacy
◼ Spanish rule riven with civil wars - both Pizarro & partner Diego de Almagro murdered
◼ Viceroy Francisco de Toledo in 1570-72 resettled many Indians under Spanish control
◼ Civil wars, forced labor, & pestilence devastated population -- down 50-95%
◼ Indians rebelled during colonial rule but gradually blended with Spanish
◼ But legacy of Incas continues to influence culture – e.g. 2000 election protests
88Terence N. D’Altroy, The Incas: Inside an American Empire Course Guide, Recorded Books, 2004
IV. How fared?
• Spanish rule riven with civil wars - both Pizarro & partner Diego de Almagro
murdered
• Viceroy Francisco de Toledo in 1570-72 resettled many Indians under
Spanish control
• Spanish civil wars, forced labor, and pestilence devastated the population --
down 50-95%
• Indians rebelled during colonial rule but gradually blended with Spanish
• But legacy of Incas continues to influence culture
• At 2000 presidential election, protests for “March of Inca Empire”
88
89
The Upshot: Multiethnic nation formed by successive waves of different peoples over 5 centuries
IV. How fared?
• Peruvian society multiethnic nation formed by successive waves of different
peoples over five centuries.
• Population decreased from nearly 10 mil in 1520s to around 600,000 in 1620
mainly because e of infectious diseases.[97]
• Spaniards and Africans arrived in large numbers under colonial rule, mixing
widely
• Europeans came after Independence
• Peru freed its black slaves in 1854.
• Chinese and Japanese arrived in the 1850s as laborers following the end of
slavery
89
90
San Martin occupied Lima and declared Peruvian independence on 28 July 1821
IV. How fared?
• Economic crises, decline of Spain, US Independence created climate for
emancipation
• Liberation movement started in Argentina and then José de San Martín
helped liberate Chile in 1818
• In 1920, San Martin‘s warships arrived on Peru’s coast
• Because Peru was stronghold of Spanish in South America, San Martin's
strategy to liberate Peru was to use diplomacy.
• After an internal power struggle Spanish viceroyalty left Lima and on 12 July
1821
• San Martin occupied Lima and declared Peruvian independence on 28 July
1821.
90
91
Peru today: Centered at Lima, population of 10 million
IV. How fared?
• Democratic , classified as an emerging market with a high level of human
development
• One of region's most prosperous economies with fast industrial growth rate
• Multiethnic population of 32 million
• Still recovering from a succession of presidential scandals
• Capital of Lima is a sprawling city of X million that dominates the politics and
economics of Peru
91
Cuzco – Summary and Conclusions
92
I. Why a great empire?
II.How did she rise?
III. How did she fall?
Inca Empire – Most advanced in Americas
Used diplomacy, enticements, & military to dominate 12 mil.
Crushed by 168 of Pizarro’s Spanish conquistadors in 1532
• Colonization shaped Latin American for 500 years• Top tourist site in a still emerging country
# 5. South America – Whither the Forgotten Continent?
IV. How fared?
Cuzco – Summary and Conclusions
I. Why a great city?
a. Capital of Inca Empire – Most advanced in Americas
II. How did she rise?
a. Using diplomacy, enticements, and military power dominated 10-12
million
III. How did she fall?
a. Crushed by 168 of Pizarro’s Spanish conquistadors in 1532
IV. Significance today?
a. Her colonization shaped Latin American institutions for 500 years
b. Top tourist site in a still turbulent, struggling, and inequitable country
92
Dec 18 #5
South America – Whither the Forgotten Continent? SWOT
JoeCoffey@outlook.com
Welcome – thanks for coming and interest
▪ Big topic – 13 diverse countries & 500 years in 50 minutes
▪ Big points- Colonization has shaped today
▪ But progress and potential in South America shouldn’t be overlooked
▪ My personal example - yesterday
93
Why forgotten in recent decades?
◼ Why forgotten? Uneventful
◼ Not poor enough to attract pity
◼ Never dangerous enough to excite strategic calculation
◼ Not growing fast enough to attract businesses
◼ Why it matters? Opportunities
◼ 420 million people
◼ Abundant natural resources and minerals
◼ Internal trade & cooperation could boost
94
◼ Why forgotten in recent decades?
◼ Why forgotten?
◼ Not poor enough to attract pity
◼ Never dangerous enough to excite strategic calculation
◼ Not growing fast enough to attract businesses
◼ Why it matters?
◼ 420 million people
◼ Important diverse and natural environments
◼ Abundant natural resources and minerals
◼ Cooperation could boost her over the hump
94
Michael Reid, Forgotten Continent-the Battle for Latin America’s Soul, Yale University Press, 2007, chapter 1.
Why vulnerable to European
colonization?
•Except for Aztecs and Incas, were mostly scattered hunter-gatherers
•Lacked technology - no wheeled vehicles, draft
animals, sailing ships, metal tools, weapons,
cattle, pigs, horses, wheat, rice, sugar cane,
bananas, and coffee
•No resistance to European diseases - by 1550s,
two thirds natives wiped out
•Gold and silver attracted worst kind (Cortez,
Pizzaro, pirates)
• Infidels attracted religious zealots and Inquisitors95
Colonization and European Transformation 1500-1820
• Except for Aztecs and Incas, Latin Americans were mostly
scattered hunter-gatherers
• Lacked technology - no wheeled vehicles, draft animals, sailing
ships, metal tools, weapons, cattle, pigs, horses, wheat, rice,
sugar cane, bananas, and coffee
• No resistance to European diseases - by 1550s, two thirds
natives wiped out
• Gold and silver attracted worst kind (Cortez, Pizzaro, pirates)
• Infidels attracted religious zealots and Inquisitors
95
Angus Maddison, Contours Of The World Economy, 1-2030 AD, Oxford University Press 2007, pages 87-102.
Yet, despite vulnerabilities,
won independence
•Europe had vulnerabilities too
•European wars and Spain’s decline
•Colonizers inter-married began farming and
mining
•By 1820: GDP tripled, per capita income rose
above world average
• In 1810-20s Bolivar, San Martin … organized
mounted resistance and gained independence
96
Yet ,despite vulnerabilities, won independence
• Europe had vulnerabilities too
• European wars and Spain’s decline
• Colonizers inter-married began farming and mining
• By 1820: GDP tripled, per capita income rose above world
average
• In 1810-20s Bolivar, San Martin … organized mounted
resistance and gained independence
96
Angus Maddison, Contours Of The World Economy, 1-2030 AD, Oxford University Press 2007, pages 87-102.
Key events last century◼ 1930s: Great Depression hurt exports
◼ 1940s: WWII boom for jobs and exports
◼ 1950-60s: Cold War and Castro spurred US aid
◼ By 1970s: Many dictators supported by US
◼ 1980-90s: Washington Consensus harsh reforms
◼ Mid-1990s: Left-wing presidents (Pink Revolution), anti-US, admired but didn’t adopt Cuban model
◼ 2000s: China’s commodity boom boosted growth
◼ 2010: Failures of Pink Revolutions & end of commodity boom leading to rise of pragmatism
◼ 2017: Presidential scandals and upheavals
97
Key geopolitical events last century
◼ 1930s - Great Depression hurt exports
◼ 1940s - WWII- boom for jobs and exports
◼ 1950-60s - Cold War and Castro’s communism spurred U.S. – Peace Corp and Alliance for Progress
◼ By 1970s - Many dictatorships supported by U.S.
◼ 1980-90s - Washington Consensus harsh reforms
◼ Mid-1990s - Left wing presidents (Pink Revolution), anti-U.S., admired but didn’t adopt Cuban model
◼ 2000s - Commodity boom boosted growth
◼ 2010 - Failures of Pink Revolutions and end of commodity boom leading to rise of pragmatism
◼ 2017: Presidential scandals and upheavals
97
South America: Big changes since 1990
98
Heavy Catholic population once grew much faster than world, but now slower
1990 2017 Change
Birth rate/1000 27 17 -37%
Poverty rate 14% 4% -71%
GDP ($ Trillion) 4.0$ 9.4$ 114%
GDP per capita 9,800$ 14,500$ 48%
• Since 1990 Cold War end, have been vast economic changes
• Demographic changes have been huge:
• Sharp decline in birth rate and thus population growth and increased life
expectancy
• Extreme poverty, age dependency and population in slums have improved
• GDP has doubled and GDP per capita increased 50%
98
99
-
5,000
10,000
15,000
20,000
25,000
1990 1995 2000 2005 2010 2015 2017
Per Capita GDP (PPP), 2011$
Argentina Bolivia Brazil
Chile Colombia Ecuador
Peru Uruguay Venezuela
Chile & Uruguay rise to top
Columbia, Bolivia, Peru & Ecuador lower tier
Venezuela & Argentina richest
Brazil stalls & falls
Columbia, Bolivia, Peru & Ecuador in lower tier
Changing Fortunes in South America
Changing Fortunes in South America since 1990
• Venezuela- once the richest now falling due to chaos
• Argentina replaced Venezuela as leader, but soon bested by Chile who rose
to top
• The comes Uruguay, the first to democratize and now second to Chile
• Brazil, the biggest country and BRIC, rise has stalled in recent years
• Lower tier of GDP/capita include 3 counties we have visited plus land-locked
Bolivia, with lowest
99
Wide variations in ethnicity
100
Country Amerindians White Mestizos Mulatos Black Zambos
Argentina 1% 85% 14% 0% 0% 0%
Bolivia 55% 12% 30% 2% 0% <1%
Brazil 1% 48% 23% 20% 8% 0%
Chile 3% 64% 33% 0% 0% 0%
Colombia 2% 37% 49% 8% 2% 0%
Ecuador 39% 10% 41% 5% 5% 0%
Paraguay 3% 20% 75% 4% 0% 0%
Peru 45% 15% 35% 2% 0% 0%
Uruguay 0% 88% 8% 4% 0% 0%
Venezuela 3% 43% 60% 8% 2% 0%
Ethnic Composition of South American Countries
Wide variations in ethnic composition
• Notice largest ethnic group (in bold) different for most countries
• Andean countries - still large native population
• Countries at bottom triangle – most are white
• Mestizos especially in Columbia and Venezuela
• Only with large numbers of Blacks and Mulattos – due to the large
imports of African Slaves
• Religion and language less diverse – mostly Spanish speaking
Catholics
100
Also, many commonalities
◼ Iberian colonialism, Catholicism, & ethnicities
◼ Inequality in income, wealth & political influence
◼ Development along coasts
◼ Advantages of coastal vs. interior
◼ Waves toward and away from authoritarianism
101
Night satellite photo
Also many commonalities of South American countries
◼ Iberian colonialism, Catholicism, and ethnic identities
◼ Inequality in income, wealth and political influence
◼ Development along coasts
◼ Advantages of coastal over interior areas
◼ Independence between 1810 and 1830
◼ Waves toward and away from authoritarianism
◼ Large in size relative to population
101
Michael Reid, Forgotten Continent-the Battle for Latin America’s Soul, Yale University Press, 2007, chapter 1.
Late & vacillating democracy
102
-6
-4
-2
0
2
4
6
8
10
1832
1838
1844
1850
1856
1862
1868
1874
1880
1886
1892
1898
1904
1910
1916
1922
1928
1934
1940
1946
1952
1958
1964
1970
1976
1982
1988
1994
2000
2006
2012
S. America Average Polity ScoresPolity Score -10=autocracy
+10=full democracy
6=Democracy line
Brazil-1946, Uruguay-1952, Colombia-1957, Venezuela-1968, Peru-1980, Argentina-1989, Paraguay-1992, Chile-2000, Ecuador-2006, Bolivia-2009
Late 1980s
Late & vacillating democracy
• Much political violence & instability for 2 centuries
• Until 1980s, average country was not democratic.
• Brazil was first and Uruguay second in 1952. Bolivia was last- less than
decade ago.
• Many have vacillated between autocracy and democracy – e.g. Peru
and Chile
• Venezuela is recent example reverting back to autocracy.
• Year when became mostly democratic: Brazil-1946, Uruguay-1952,
Colombia-1957, Venezuela-1968, Peru-1980, Argentina-1989,
Paraguay-1992, Chile-2000, Ecuador-2006, Bolivia-2009
102
Why democracy fared poorly?
◼ Fight for independence - longer, bloodier and more destructive than in U.S.
◼ Iberian colonial order left poorly equipped for democracy
◼ Great inequality due to serfdom of natives and slavery
◼ Geography - lack of navigable rivers, high altitudes, and poor communications
103
Why has democracy fared so poorly?
• Fight for independence was longer, bloodier and more
destructive than in U.S.
• Iberian colonial order left poorly equipped for democracy
• Great inequality due to serfdom of natives and slavery
• Geography - lack of navigable rivers, high altitudes, and poor
communications
103
Michael Reid, Forgotten Continent-the Battle for Latin America’s Soul, Yale University Press, 2007, chapter 3
Late to democracy but support it
104<http://www.pewglobal.org/2015/11/18/1-support-for-democratic-principles/
South America US
People can practice their
religion freely 72 84
Women have same rights as
men 80 91
Honest elections are held
regularly with choice of at
least 2 parties 70 79
People can say what they
want w/o censorship 69 71
Percent agreeingPrinciple
Broad Support for democratic principles
• Support fundamental democratic principles of religious
freedom, women’s rights, honest elections, and freedom of
speech
• Overall, support of democratic principles of 70 to 80% range
– not much less than U.S.
• Even Venezuela is supportive of these fundamental
democratic principles
• With this support, hopefully democracy with continue and get
more firmly established
104
Share of world GDP & GDP/capita
105
4.0%
4.5%
5.0%
5.5%
6.0%
6.5%
90.0%
95.0%
100.0%
105.0%
110.0%
115.0%
120.0%1
96
9
19
70
19
71
19
72
19
73
19
74
19
75
19
76
19
77
19
78
19
79
19
80
19
81
19
82
19
83
19
84
19
85
19
86
19
87
19
88
19
89
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
Po
pu
latio
n a
nd
GD
P %
Wo
rld
Pe
r C
ap
ita
GD
P %
Wo
rld
South America GDP vs. World
1980 Peaks
Per capita GDP volatile & below 1970s
Share of world GDP,GDP/capita and population not back
to peaks
• GDP share rising but not reached its 1980 peak share of 6.4%
• GDP/capita relative to the world peaked at 117% in 1970s and
dropped down to 90%, but recovered until the recent
commodity bust.
• Basic point: GDP share not back to1970s, but significant
gains
105
Corruptions Perception Index, 2017
106
0
20
40
60
80
CPI Score 2017
Except Uruguay and Chile,
scores badly
• Corruption is defined as misuse of public power for private benefit
• South America - made some progress ,but except for Chile and Uruguay,
score poorly for corruption.
• Problem - no overarching policies to address the historic and structural
causes of corruption
• Several high profile cases - Odebrecht bribery case in Brazil, Ecuador and
Peru
• Need to tackle structural issues of political funding, public procurement and
the strengthening of legal institutions.
• From
<https://www.transparency.org/news/feature/perceptions_remain_unchanged_
despite_progress_in_the_americas
106
The Corruption Perceptions Index -defines corruption as "the misuse of public power for private benefit and a scale from 100 (very clean) to 0 (highly corrupt)“ to 0.
Why disappointing progress?Unstable political & economic systems
◼ Successions of failed dictators and policies
◼ Dependence on commodity exports
◼ Protectionist and inflationary policies
◼ Blamed others for ills
◼ Inequality of wealth and political power
◼ Lack of political consensus
◼ Corruption
◼ Inadequate health, education, & innovation
107
Why disappointing progress?Unstable political and economic systems
• Successions of failed dictators and policies
• Dependence on commodity exports
• Protectionist and inflationary economic policies
• Blamed others – U.S. interventions, high industrial import prices vs. low
commodity export prices
• Inequality of wealth and political power
• Lack of political consensus
• Neglect health, education & innovation
107
Michael Reid, Forgotten Continent-the Battle for Latin America’s Soul, Yale University Press, 2007, chapter 2.
History of lousy governance
◼ Low Governance, Safety & Security
◼ Rankings: Venezuela (138), Bolivia (97), Argentina (104), and Paraguay (114)
◼ Discontent not just with government, but entire political establishment
◼ Democracy impeded by failures in political effectiveness and political culture
108
History of lousy governance
• Governance and Safety & Security scores low
◼ World governance rankings: Venezuela (138), Bolivia (97), Argentina (104), and Paraguay (114)
◼ Discontent not just with government, but the entire political establishment
◼ Democracy impeded due to failures in political effectiveness and political culture
108
Source: Legatum 2016 Prosperity Index
109Source: PEW Spring 2014 Global Attitudes Survey. Median “does not care” response is 66% for other areas of emerging world.
• Latin Americans are unhappy with their governments
• Over 60% say that “most government officials do not care
what people like me think”
• In addition to these polls, as already mentioned various
indexes of the quality of Latin American governments reveal
their low international rankings
109
“Pink tide” crested; less liberal now
110
“Pink tide” crested, but still mostly left leaning
• Darker color the more left, Blue is on right
◼ “Pink tide" – anti-Americanism, leftist, more authoritarian and protectionist period of 1998-2009.
◼ Opposition to "Washington consensus” policies of free markets and democracy
◼ Pink tide leaders: Christina de Kirchner (Argentina) Hugo Chávez of Venezuela (inaugurated 1999), Lula da Silva of Brazil (inaugurated 2003) and Evo Morales of Bolivia (inaugurated 2006, is only one still in power)
◼ Leftist became ensnarled in corruption and economic hardships may have “run its course”
◼ Setbacks to pink tide in Argentina, Brazil, Peru and Chile
110
Pitfalls of Pink Tide
◼ Pink Tide Populism
◼ Strong charismatic leader purports to be a savior
◼ Denies necessity for checks and balances
◼ Promises instant gratification & delayed pain of paying
◼ Blames problems on capitalism & foreigners
◼ Pitfalls
◼ Short-term popularity but long-term disaster
◼ Redistribution unsustainable and inflationary
◼ Challenge
◼ Improve equality without endangering growthMichael Reid, Forgotten Continent-the Battle for Latin America’s Soul, Yale University Press, 2007, chapter 1.
111
Pitfalls of Pink Tide
Pink Tide Populism
◼ Strong charismatic leader purports to be a savior
◼ Denies necessity for checks and balances
◼ Promises instant gratification & delayed pain of paying
◼ Blames problems on capitalism & foreigners
◼ Pitfalls
◼ Short-term popularity but long-term disaster
◼ Redistribution unsustainable and inflationary
◼ Challenge
◼ Improving equity without endangering growth
111
Michael Reid, Forgotten Continent-the Battle for Latin America’s Soul, Yale University Press, 2007, chapter 1.
Political shifts after Pink Tide
◼ Venezuela in crisis under President Maduro
◼ Brazil President Rousseff impeached
◼ Argentine President Macri trying to overcome Cristina and Néstor Kirchner’s ruinous regime
◼ Peru’s last 4 Presidents unpopular
112
Large political shifts in 21st century
• Venezuela in crisis under President Maduro
• Brazil President Rousseff impeached
• Argentine President Macri trying to make Argentina a “normal”
country again
• Peru’s last 4 Presidents very unpopular
• Columbia’s fragile peace with FARC after decades of 220,000
deaths and 6 million displaced
112
2018 political shake-ups
◼ Brazil: Election of right-wing Jair Bolsonaro with promises of reforms & realign to U.S.
◼ Argentina: Economy worst of major countries
◼ Venezuela: Economic disaster - millions flee to Colombia & Brazil posing a migrant problem
◼ Peru: President Kuczynski resigns amid scandal
◼ Chile: Shift from left to conservative President
113Source: Geopolitical Futures, Nov 16, 2018
2018 Shake-ups
◼ Brazil: Election of right-wing Jair Bolsonaro with promises of reforms & realign to U.S.
◼ Argentina: Economy worst of major countries
◼ Venezuela: Economic disaster - millions flee to Colombia & Brazil posing a migrant situation
◼ Peru: President Kuczynski resigns amid scandal
◼ Chile: Shift from left to conservative President
113
Good news: Significant progress
◼ 30 years ago semi-feudal and poor living in countryside with incomes half today’s
◼ Rising middle class – important for democracy
◼ Need put in perspective faulty governments – they faced huge challenges
114
Encouraging signs -rising middle class and declining
poverty
• Has made progress – 30 years ago semi-feudal living in
country side with incomes half today’s
• Rising middle class – important for democracy
• Need put in perspective faulty governments – they faced huge
challenges
◼ Thanks to boom of commodities for export and demand from China, the middle class has increased to one-fourth to nearly one-third in some countries
◼ Also share of people poor dropped down from 17% to 7% by 2011.
114
Bad news:
Downturn in globalization, China & commodities
115
2011 Boom
2009 Financial crisis
Slower China
Global Price Index of All Commodities
Post Cold War Globalization & China
Globalization & China
Bad news: Challenges ahead
◼ South America and world have enjoyed a boom in trade and economic growth since 1990 end cold war
◼ China during this period grew an unprecedented double-digit rates
◼ Downturn in globalization, China growth & commodity prices rose .
◼ This growth was interrupted by Financial crisis and globalization has since slowed
◼ Now China as well as Europe have slowed a commodity prices have fallen
115
Major economic challenge –boosting productivity
◼ Avoid “Middle Income Trap:” Growth from productivity not population. SA productivity only 1/10 needed
◼ Convert 50% informal sector (street vendors, etc.) to productive jobs
◼ Consolidate small businesses: only 1/6 as productive as larger businesses
◼ Invest in R&D: less than 1/3 rate of E Asia
116
Major Economic Challenge – Boosting Productivity
• Avoid “Middle Income Trap:” Growth from productivity not population. SA
productivity only 1/10 needed
• Convert 50% informal sector (street vendors, etc.) to productive jobs
• Consolidate small businesses: only 1/6 as productive as larger businesses
• Invest in R&D: less than 1/3 rate of E Asia
116
See especially Michael Reed, Forgotten Continent, Chap 13
Summary: South America’s SWOT◼ Strengths – Coastal, natural resources, rising
middle class, workforce growth
◼ Weaknesses – Inequality, corruption, fragile democracies, low regional integration, instability
◼ Opportunities – Regional cooperation, add value to exports, tourism
◼ Threats – De-globalization, low commodity prices, political unrest, populist pitfalls, fickle U.S. policy, China’s predation
◼ Bottomline: Vast resources and improving democracies, not to be forgotten in the future
117Next Presentation #6: Understanding Chile - Dec 20
Summary: South America’s SWOT
◼ Strengths – Coastal, natural resources, rising middle class, workforce growth
◼ Weaknesses – Inequality, corruption, fragile democracies, low regional integration, instability
◼ Opportunities – Regional cooperation, add value to exports, tourism
◼ Threats – De-globalization, low commodity prices, political unrest, populist pitfalls, fickle U.S. policy, China’s predation
◼ Bottomline: Vast resources and improving democracies, not to be forgotten in the future
Thanks for coming
117
Next Presentation #6: Understanding Chile, Dec 20
#6. Dec 20 Understanding Chile
How rose from isolated land to Latin America’s most advanced nation
JoeCoffey@outlook.com
Understanding Chile
• Thankyou for coming
• You have been a great and friendly cruise companions
• Despite the glitches and delays earlier, thanks to the good
support of NCL staff and your forbearance ,I hopefully will
succeed in helping you better understand Chile
• Some have asked for copies of my notes, those interested
can email me at joecoffey@outlook.com and will email you a
copy
118
Story of Chile
119
• 2,600-mile long only 100-mile wide string bean
• Like fairy tale Jack in Bean Stalk, suffered, struggled, had some luck and became rich
• Blessed with copper deposits, overcame colonizers, isolation, dictators, economic zealots
• Now “Chilecon Valley”, Latin America’s most advanced country
Story of Chile• 2,600-mile long only 100-mile wide string bean• Like fairy tale Jack in Bean Stalk, suffered, struggled, had some luck
and became rich• Blessed with copper deposits, overcame colonizers, isolation, dictators,
economic zealots
• Now “Chilecon Valley”, Latin America’s most advanced country
119
Chile: String bean long & lean but resource rich & ready
◼ Only 17 million people (world’s 64th size)
◼ Yet larger than Texas or France
◼ Went from isolation to Spanish backwater to Copper king, and now “Chilecon Valley”
◼ South America’s 1st advanced (OECD, top 36) and highest GDP/capita country
◼ South America’s most competitive, least corrupt, freest economy
◼ On-the-ready to protect & seize opportunities 120
Chile: String bean long & lean but resource rich & ready
• Only 17 million people (world’s 64th size)
• Yet larger than Texas or France
• Went from isolation to Spanish backwater to Copper king, and now to
“Chilecon Valley”
• South America’s 1st advanced developed (OECD, world’s top 36) and
highest GDP/capita country
• South America’s most competitive, least corrupt, freest economy
• On-the-ready to protect & seize opportunities
120
Chile’s early history
I. Ancient: Isolation, Monte Verde one of oldest peoples in Americas (14,500BC), worlds 1st mummification 5,000 BC
II. Contact with Europe: Magellan (1520), Valdiva Spanish Conquest (1541) Francis Drake plunders (1578)
III. Independence: Declared (1818), Spain recognized (1844)
IV. Strategic steps: Minerals discovery, Silver Rush(1832-50), Claim Magellan Straits (1845), War of Pacific (1884)
121
Chile’s early history
I. Ancient: Isolation, Monte Verde one of oldest peoples in Americas
(14,500BC), worlds 1st mummification 5,000 BC
II. Contact with Europe: Magellan (1520), Valdiva Spanish Conquest
(1541) Francis Drake plunders (1578)
III. Independence: Declared (1818), Spain recognized (1844)
IV. Strategic steps: Minerals discovery & rise of silver (1832), Claim
Magellan Straits (1845), War of Pacific (1884)
121
Sir Francis Drake Sacked Valparaiso in 1578
122
• Sir Francis Drake (1540–96): English sea captain, privateer,
slave trader, and explorer made second circumnavigation
• In 1579, attacked ports and pillaging towns on Chile’s coast
• Sacked Valparaíso, captured ship of Chilean wine
• Near Lima, Drake captured a Spanish ships laden with
Peruvian gold, jewels and silver
122
123
Chief Lautaro of Mapuche who conquered the conquistadors
Mapuches: Only natives to resist Incas and Spanish
• Mapuche - only indigenous of South America to successfully oppose
both Inca Empire and Spanish Conquistadors
• In southern Chile, Mapuches massacred Spanish Governor and his army
in 1553 and took several cities under Spanish rule
• In early 17th century, Spanish tried to annihilate, but Mapuche’s
maintained an independent state throughout colonial era
• In the 19th century Chile lessened Mapuche resistance
• Today Mapuche’s 9% of population and still strive for greater autonomy
123
1830-50 Silver Rush
◼ Attracted 1000s
◼ Created wealth & expansion
◼ By 1870s silver mining ended
◼ Mining shifted to nitrates
◼ Rich miners went into banking & agriculture & commerce
124
La Descubridoe - 3rd biggest silver mine in world
• Placer deposits of gold were exploited by the Spanish in 16th century
• Only after independence in 19th century did mining once again get
prominence
• In 1832 discovered silver that attracted thousands
• Between 1830 and 1850 silver mining caused rapid expansion
• By 1870s silver mining ended and mining reoriented to potassium nitrate
for explosives and fertilizer
• After silver rush, rich miners diversified into banking, agriculture and
commerce
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Chilean silver rush, Wikipedia
Readiness: Protecting The Straits of Magellan
125
• An early example of Chile’s readiness and actions to protecting its strategic
turf is that Straits of Magellan
• In 1843 Chile possessed Straits fearing occupation by Great Britain or France
• The Straits of Magellan was main Atlantic to Pacific passage until 1914
Panama Canal
• Straits were best way for Chile to secure access and control of reaching rest
of world
• Straits were named after Ferdinand Magellan -first European in Chile in 1520
during his global circumnavigation.
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Source: Wikipedia, Strait of Magellan and Tierra del Fuego
Readiness: War of Pacific (1879-84): Chile vs. Bolivia-Peru
•Dispute: Chilean claims on mineral rich
coastal Bolivia in Atacama Desert
•Chile won: Took Peru’s & Bolivia’s (Arica)
coast, cut-off Bolivian access to Pacific,
defeated Peru, increase territory by 30%
•Triggered: when Bolivia taxed & tried to sell
assets of Chilean mining company
•Root causes: Antipathy of Peru vs. Chile,
vagueness of boundaries, rich nitrates
126
• Another early strategic action of Chile was in War of the Pacific ( Saltpeter
War)- between Chile and a Bolivian-Peruvian alliance, 1879 to 1884
• Dispute: Chilean claims on coastal Bolivia in Atacama Desert
• Chile won: Took Peru’s & Bolivia’s nitrate rich coast, cut-off Bolivian access to
Pacific, defeated Peru
• Triggered: when Bolivia taxed and attempted to sell assets of Chilean mining
company
• Root causes: Antipathy of Peru vs. Chile, vagueness of boundaries, rich
nitrates
• Until petroleum-based fertilizer , nitrates big boom to Chile and resulted in
900% increase in government reserves before petroleum fertilizer displaced
nitrites and nearly bankrupted Chile.
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Chile’s modern history
V. Depression & Socialism: Great Depression (1930s), communist and socialism (1938), Inflation (1964), election of Marxist Allende (1970)
VI. Military coup & General Pinochet dictatorship (1973-98)
VII. Transition to liberal democracy and rise (1998-2010)
VIII.Political swings left & right and “Chilecon Valley” (2010-?)
127
Chile’s Modern history
V. Depression & Socialism: Great Depression (1930s), communist
and socialism (1938), Inflation (1964), election of Marxist Allende
(1970)
VI. Military coup & General Pinochet dictatorship (1973-98)
VII. Transition to liberal democracy and rise (1998-2010)
VIII. Political swings left & right and “Chilecon Valley” (2010-?)
127
Chile’s rough rise to democracy
128
-8
-6
-4
-2
0
2
4
6
8
10
12
1818
1825
1832
1839
1846
1853
1860
1867
1874
1881
1888
1895
1902
1909
1916
1923
1930
1937
1944
1951
1958
1965
1972
1979
1986
1993
2000
2007
2014
Polity Score
Democracy
Autocracy
Pinochet
• Chile has struggled below the democracy line until the transition on 1990s
• During 3 periods:
• `in early 1800s
• Great Depression of 1930s
• Pinochet dictatorship of 1970-1980s
• Made transition since Pinochet and now rated as a “10” full democracy
• Politics remain dynamic – swinging from left to right in last 3 Presidential
elections
128
Salvador Allende (1908-73): World’s 1st elected Marxist President
129
• Elected 1970 & rapidly socialized economy
• Economy boomed initially, but soon fell
• Ousted by military with US support
• Replaced by brutal dictator Gen. Pinochet
• Committed suicide
Salvador Allende - President of Chile from 1970 until 1973,
• Life-long member Socialist Party of Chile, senator and cabinet minister
• In 1970, world’s 1st elected President of a liberal democracy and rapidly
socialized economy
• By 1973 the economy was crippled by 800% inflation, strikes,
expropriation of businesses, protectionism, economic sanctions imposed
by US, without foreign reserves, and weak support from USSR
• Ousted in 1973, by military and committed suicide
• Allende name remains famous as his cousin, Isabel Allende, Chilean
writer and "world's most widely read Spanish-language author
129
General Augusto Pinochet: Brutal rule & legacy
◼ Coup & ruled 1973-90
◼ Jailed, executed thousands
◼ Abolished civil liberties
◼ Radical economic liberalization by “Chicago Boys”
1301916-2006
• Pinochet’s US-backed coup overthrew Allende in 1973
• Jailed, tortured, and executed thousands
•Abolished civil liberties, dissolved congress, banned union
activities, erased Allende's reforms
• Began radical program of liberalization, deregulation and
privatization, slashing tariffs, welfare programs and deficits.
• Neo-liberal economic reforms crafted by “Chicago Boys” -
influenced by University of Chicago professors
130
1975 radical free-market reforms of “Chicago Boys”
◼ World’s first to break from socialism & extreme state capitalism to market-oriented
◼ Allende’s socialism led to GDP rapidly falling, 1000% inflation & exhausted foreign reserves
◼ Copper mines remained nationalized but new mineral deposits opened to private investment
◼ Pensions, healthcare & education privatized
◼ Wages cut 8% & social budgets cut 20%
◼ Expropriated properties returned or sold
131
1975 radical free-market reforms of “Chicago Boys”
• World’s first to break from socialism and extreme state capitalism to
market-oriented
• Allende’s socialism led to GDP falling rapidly, 1000% inflation &
exhausted foreign reserves
• Copper mines remained nationalized but new mineral deposits opened
to private investment
• Pensions, healthcare & education privatized
• Wages cut 8% & social budgets cut 20%
• Expropriated properties returned or sold
131
Results of liberalization
◼ Expropriated properties returned or sold
◼ World Bank, IMF, multinationals returned
◼ “Miracle of Chile” 1984-98
◼ But critics say more inequality & poverty
132
GDP growth
Results of liberalization
• Expropriated properties returned or sold
• World Bank, IMF, multinationals returned
• “Miracle of Chile” 1984-98
• But critics say more inequality & poverty
132
Transition to Democracy – Dictator Pinochet voted
out!◼ 1980: Constitution set vote if “Yes” Pinochet continues
◼ 1988: voted 56% “No” – Alwin elected President
◼ 1988-98: But, Pinochet headed Army & senator-for-life legal protection
◼ 1998: Arrested in UK on Spanish extradition
◼ 1998: Released for ill-health, returned to Chile & arrested
◼ 2006: At death - 300 criminal charges pending
133
Transition to Democracy – Dictator Pinochet voted out!
◼ 1980: Constitution set vote if “Yes” Pinochet continues
◼ 1988: voted 56% “No” – Alwin elected President
◼ 1988-98: But, Pinochet headed Army & senator-for-life legal protection
◼ 1998: Arrested in UK on Spanish extradition
◼ 1998: Released for ill-health, returned to Chile & arrested
◼ 2006: At death - 300 criminal charges pending
133
134
Five presidents since transition to democracy (1990–2018), celebrating the Bicentennial
Where else have 5 smiling presidents in same photo?
• Chile transitioned to democracy over past 2 decades
• Pinochet lost 1988 plebiscite 56% vs. 44%
• Elected Aylwin, who began the transition back to democracy
• 5 presidents since Pinochet, 4 left leaning
• Billionaire Sebastián Piñera - first rightist President in 20 years
• Pinera succeeded by Michelle Bachelet, of Socialist Party
• Pinera re-elected in 2018 and is current president
134
135
-
5,000
10,000
15,000
20,000
25,000
1990 1995 2000 2005 2010 2015 2017
Per Capita GDP (PPP), 2011$
Argentina Bolivia Brazil Chile Colombia
Ecuador Peru Uruguay Venezuela
2000 Chile in 1st
Chile rose to top of South America
Chile rose to top in South America
• Highest per capita GDP since 2000
• Venezuela and Argentina, long-time leaders have fallen back
135
Chile’s Economic Rise Supported by Copper
136
80% exports 1970s
Tons 5X
But only 50% exports
• Chile’s Economic Rise Supported by Copper
• Copper production went from under 1 million tons in late-1970s to over 5
million tons
• Despite 5X rise, copper went from a peak of 80% of exports to 50% today.
• Over this time, economy diversified, Chilean GDP per capita rose to top on
South America
• Prior to economic reforms, limitations in capital and economic policies
restrained production
• Market oriented policies of 1980s spurred economic growth, entrepreneurism
and expansion of other exports
• Chile has been world’s top copper producer for over 30 years and likely to
remain so into the future
136
“Chilecon Valley” -Tops South America
◼ Highest GDP per capita
◼ Trade openness (56% GDP) & low trade barriers
◼ Highest Global competitiveness
◼ Greatest Economic Freedom
◼ Lowest Perception of Corruption Index
◼ Highest PISA academic test scores 137
“Chilecon Valley” -Tops South America
• HIGHEST GDP PER CAPITA
• TRADE OPENNESS (56% GDP) & LOW TRADE BARRIERS
• HIGHEST GLOBAL COMPETITIVENESS
• GREATEST ECONOMIC FREEDOM
• LOWEST PERCEPTION OF CORRUPTION INDEX
• HIGHEST PISA ACADEMIC TEST SCORES
137
Examples of Chile’s innovations
◼ Start-Up Chile: Pay foreign entrepreneurs to visit, interact, stay to create a tech entrepreneurial culture
◼ Aquaculture: Major salmon producer
◼ Copper: World leader – opened to foreign investors, stabilization fund to dampen cycles
◼ Fruits & vegetables: Capitalize on off-season
◼ Lithium: Leading producer of lithium -booming growth of electric cars and green
138
Examples of Chile’s innovations
• Start-Up Chile: Pay foreign entrepreneurs to visit, interact, stay to
create a tech entrepreneurial culture
• Aquaculture: Major salmon producer
• Copper: World leader – opened to foreign investors, stabilization fund
to dampen cycles
• Fruits & vegetables: Capitalize on off-season
• Lithium: Leading producer of lithium - booming growth of electric cars
and green
138
Readiness & Resilience to overcome double whammys
◼ Feb 2010: 8.8 earthquake – $30 bil damage and 500 dead and tsunami devastated coastal cities
◼ August 2010: Copper-gold mine trapped 33 underground for record 69 days
139
Feb 2010: 8.8 earthquake shook 80% of Chile’s population, caused blackouts
affecting 93% , physical damage of $4-7 bil and economic damage of losses to
economy of 15-30 bil., , deaths over 500 and 9% in affected regions lost their
homes
August 5, 2010: Cave-in on 5 August 2010 at the San José copper-gold mine in
the Atacama Desert near Copiapó, Chile. The accident trapped 33 men 700
meters (2,300 ft) underground who survived for a record 69 days.
Thanks to the innovative policy of economic stabilization of Copper revenues,
Chile has been able to overcome these tragedies and continue to remain on top
of South America
139
140
Chile today
Santiago
• Santiago is financial and business capital
• Largest city with 7 million
• Also the cultural and entertainment center of Chile
• Chile stands not only tall in South America advancement – but also in
buildings - Great Santiago Tower tallest building in South America
140
Understanding Chile: Summary & Conclusions
◼ String bean long & lean, lightly populated
◼ Blessed with resources and readiness
◼ Overcame Marxism and military dictator to become South America’s most advanced country
◼ Continues to innovate into a “Chilecon Valley”
141
Thank you – Last lecture, hope to see you on future cruises!
JoeCoffey@outlook.com
Understanding Chile: Summary & Conclusions
◼ String bean long & lean, lightly populated
◼ Blessed with resources and readiness
◼ Overcame Marxism and military dictator to become South America’s most advanced country
◼ Continues to innovate into a “Chilecon Valley”
Thankyou very much – hope to see you again on future cruises
141
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